Algernon Pharmaceuticals Inc. C.AGN

This company is in a real pickle

[Whalewatcher1]

Th y need $ As of Aug 31 had a little over $2m cash and $2m receivable from Australia. They have been spending about $2m a quarter. Thus if math is right, they run out of cash (assuming Tex credits come in) In March. Therefore a financing is imminent and clearly not in a position of strength to negotiate a premium on pricing as some on this board have allusions. Financing will likely come with sizesble discount and more warrants, this is how the process works.  They are attempting to list on Nasdaq but have a going concern on financial statements which will likely need to first be rectified with raise. The company has just trashed the Canadian investors, thus do they get caught not being able to uplist for lack of cash to meet Nasdaq requirements and Canadian investors no longer wanting to be supporting? They should be appreciated of all the investment support by Canadian investors to get to this point.  I don’t think this is a blame Canada issue. This company runs studies with drugs that what, can be bought over the counter from Japan and on line? What type of pricing could they really  justify if they can figure out getting approved and is a big pharma really going to partner with this risk of being able to buy the pills online at likely a fraction of cost needed to justify the large upcoming investment for approval? Do they have people on management, board or advisors with any experience running properly designed clinical studies and drug development experience?  Is there proper focus, or do they keep throwing new darts at the wall with new distraction (ideas)?They don’t have the money to run multiple studies, why not stick with a plan and get 1 study done right that is properly designed and sized and put more $ into 1 study instead of multiple small studies that don’t properly answer any study hypothesis?  This is where they could use a board with the proper experience in taking drugs through approval and can provide direction and oversight. We can easily look up the track record of management and stock performance of their previous companies, it’s not good. Will they raise enough capital to run properly controlled studies to determine if drug is truly effective, or continue small underpowered studies that don’t tell us enough information? Companies in the US raise $50m plus at this stage for these reasons. This is a difficult and very specialized business that requires a team of experts.  New investors will require large discount to supplement these risks and along with more warrants, then they sell the stock and hang onto the free warrants which can cap the stock upsize potential. should we  expect a larger than normal discount to financing if they can find investors? 

 

2021 was a horrible year for US biotech, many biotechs trading near cash value and investors have many great choices to consider for investment run by experienced teams in drug development with proprietary compounds. US investors will first look at the team, can they develop and execute on the plan,,what’s their track record with current company? Nasdaq on its own is not the solution here and is there risk that another share consolidation is needed to reach Nasdaq min requirements? Anyways, I don’t mean to be a Debbie downer but these are my frustrations and some of reasons stock is likely where it’s at.